Double bottom looming as bulls prepare for a move to the yearly high at 116.35

• The rally in US Treasury yields underpins USD/JPY as it gains close to 0.70%.
• In general, the strength of the US dollar in general weighs on the USD/JPY pair.
• USD/JPY Technical Outlook: Bullish bias, as shown by the DMAs under the exchange rate, along with a double bottom chart pattern.

Improved market sentiment, fueled by reports of another round of Russia-Ukraine talks, and higher US Treasury yields benefited the dollar. The USD/JPY is up for the first time this week, up 0.70% on the day, trading at 115.63 at time of writing.

Portraying market sentiment, European stocks ended Wednesday’s session in the green, while US stocks advanced. The US Treasury yield trimmed some of Tuesday’s sharp losses, led by the benchmark 10-year note rising 13 basis points to 1,844%. Higher yields are supporting the dollar, with the US Dollar Index gaining 0.15% to settle at 97,580.

USD/JPY Price Forecast: Technical Outlook

After hitting a low of 114.78, USD/JPY has risen steadily since the start of the Asian session on Wednesday. In the last three hours, it fell from the R2 daily pivot at 115.63 to Tuesday’s high at 115.28 before resuming the uptrend as USD/JPY bulls prepare to attack the yearly high at 116.35.

USD/JPY is biased to the upside, as shown by two factors. Firstly, the daily moving averages (DMAs) are below the spot price and secondly, a possible double bottom pattern on the daily chart. That said, the first resistance level for USD/JPY would be the neckline around 115.78. The break of the latter would expose 116.00, followed by the yearly high at 116.35.

Technical levels